Like a fairy tale - and Irving reminds us with tireless zeal that his novel is a fairy tale -''The Hotel New Hampshire'' is both fanciful and cruel. The Berry family is oddly susceptible to disaster; suicides, airplane crashes, blindings by terrorist bombs abound. Nor is this feisty crew beyond wreaking havoc among themselves. ''To each other, we were as normal and nice as the smell of bread, we were just a family,'' observes the narrator (named John, in the autobiographical fashion of the day); but sibling incest is a dominant motif, and their incessant colloquys are conducted in a language heavy with insult and innuendo.